Rare Book Monthly

Ebay Offers Buyers A New Dispute Resolution Process

- by Michael Stillman

Ebay is changing its dispute resolution process.

By Michael Stillman

Ebay, the largest online auction seller (and now significant fixed-price seller) announced some changes which may prove to be important in time. It certainly represents a 180-degree turn in the area of customer service, though how meaningful it will prove to be will take time to see. Suffice it to say that eBay is turning in the direction of providing customer service, something they have been loathe to do for a long time.

However, there may not be a lot in this for eBay sellers. As described, the process is targeted to dissatisfied buyers, not abused merchants. What is being offered will essentially mirror the dispute resolution process operated by Pay Pal, except that eBay will manage the program, and it will apply to sales transacted outside of as well as through Pay Pal. This is a buyer process, that is, sellers cannot use this dispute resolution to deal with customers they believe to be abusive.

There is one instance where sellers may be served as well as buyers. In an April 15 announcement, eBay says, "In certain cases, eBay will refund the buyer and not find the seller at fault." At another point they say, "We understand that there will be times where both buyer and seller may be right. In those cases eBay may absorb the cost to reimburse the buyer without any impact on the seller." This would make everyone happy, but we will guess that either it will not happen very often or someone will be asked to bear the cost of this largesse.

In answer to the question "How does this process benefit sellers," eBay responds: "The new system is designed to have fewer communication steps between buyer and seller, and require a shorter time to dispute resolution. Moving the process from PayPal to eBay also will allow us to better monitor and prevent buyer fraud or abuse and adapt quickly to seller needs." A specific example of this is that eBay says its monitoring of the process will enable them to tell if a buyer is making an inordinate number of returns, from which they can, in some unspecified manner, "step in quickly to prevent abuse."

What is not addressed is perhaps the most vexing of all issues for sellers - feedback. When eBay replaced its mutually destructive feedback system to prevent unfair retaliatory feedback by sellers, they left sellers vulnerable to unfair feedback from buyers. This can spell disaster for unfairly accused sellers whose reputations are tarnished but are unable to defend themselves. This new dispute resolution does nothing to deal with this problem, even in cases where eBay finds it was the seller, not the complaining buyer, who was aggrieved.

To the question how this new process will affect feedback ratings, eBay says, "The Feedback system, including Detailed Seller Ratings, will not change as a result of this process. In testing this new process, we have seen no material difference in feedback or DSR scores." To the specific question of what happens when a seller successfully appeals a buyer's dispute, eBay says, "When eBay decides a seller is not at fault for a dispute, the seller's Buyer Satisfaction Rating will not be impacted." So even in cases where eBay determines the buyer abused the seller, it will allow abusive feedback to stand, possibly scaring customers away from the abused seller. This is not fair, and with a feedback system that, in rightly protecting aggrieved buyers from retaliatory feedback by abusive sellers, has offered no balance for cases where the abuse goes in the other direction, eBay needs to find a way to provide balance.

While eBay was not particularly specific in explaining their reasons for the change, they did note: "Keeping eBay a thriving marketplace requires a close partnership between sellers and eBay to give buyers the experience they expect. We continue to invest in driving traffic and buyer loyalty, and we need your help to make buyers happy and keep them coming back." Perhaps this can be interpreted something along the lines that their mortal competitors, notably Amazon, are currently in a better position to provide unhappy customers with personal service, and eBay believes they must do a better job if they are to compete. Consequently, this fix is targeted more to the buyer than the seller. The program will even provide a telephone number that unhappy buyers can use to contact eBay! Who knew that eBay had telephones and customer service reps?

The implementation of this program will take place over the coming months. At first, it only will be used for claims that an item was not received, but this later will be expanded to cover items that are not as described. Ebay plans to have the complete program rolled out in time for the 2009 holiday season.